Energy Focus(US:EFOI)2019-11-13 13:28Financial Performance - Net sales for the first nine months of 2019 decreased by 38.8% to $9.2 million compared to $14.9 million in the same period of 2018, primarily due to a 55.8% decrease in military product sales[125]. - Gross profit for the third quarter of 2019 was $1.0 million, representing 35.3% of net sales, an increase from 24.8% in the third quarter of 2018[127]. - The company incurred a net loss of 66.1% of net sales for the first nine months of 2019, compared to a net loss of 40.8% in the same period of 2018[123]. - For the three months ended September 30, 2019, the net loss was $0.9 million, a decrease from $1.9 million for the same period in 2018, primarily due to lower operating expenses[141]. - For the nine months ended September 30, 2019, the net loss remained at $6.1 million, consistent with the same period in 2018[141]. Operating Expenses - Operating expenses for the first nine months of 2019 totaled $6.8 million, a decrease of $2.1 million compared to $8.9 million in the same period of 2018, primarily due to reduced salaries and related benefits[133]. - Selling, general, and administrative expenses for the third quarter of 2019 were $1.7 million, a decrease from $2.5 million in the third quarter of 2018, driven by lower headcount and severance expenses[132]. - Product development expenses for the first nine months of 2019 were $1.0 million, down from $1.9 million in the same period of 2018, reflecting lower product testing expenses[131]. Cash and Debt Position - Cash and cash equivalents as of September 30, 2019, were $0.6 million, with $3.0 million in total debt, including $1.7 million from subordinated convertible notes[119]. - As of September 30, 2019, cash and cash equivalents were approximately $0.6 million, down from $6.3 million at December 31, 2018[149]. - The company had a total debt of $3.0 million, including $1.3 million on a revolving credit facility and $1.7 million in subordinated convertible notes[143]. - Net cash used in operating activities was $6.3 million for the nine months ended September 30, 2019, compared to $3.8 million for the same period in 2018[152][153]. - Net cash provided by financing activities was $0.7 million for the nine months ended September 30, 2019, primarily from proceeds of subordinated convertible notes[156]. Customer Concentration and Commitments - Sales to two major customers accounted for approximately 20% and 23% of net sales for the nine months ended September 30, 2019[143][168]. - The company had approximately $0.8 million in outstanding purchase commitments for inventory as of September 30, 2019[158]. Future Outlook - The company continues to face substantial doubt about its ability to continue as a going concern, despite restructuring actions aimed at reducing operating expenses[138]. - The company plans to pursue additional external funding and continue developing new technologies to enhance its product lines and expand its customer base[120]. - The company plans to pursue external funding sources to support its operations and achieve profitability[145]. - The accumulated deficit as of September 30, 2019, was $123.6 million, indicating substantial historical losses[143].